A VA lender will make restitution after a New York state investigation found it had failed to refund hundreds of surplus lender credits
A VA lender has been fined $1.04 million for overcharging for VA loans.
The New York Department of Financial Services announced that Mortgage Research Center – which does business as Veterans United Home Loans and VAMortgage Center – will pay about $604,000 in restitution to New York consumers. The company will also pay a penalty of $500,000 to the state.
According to the DFS, an examination found that in at least 322 cases, Veterans United did not refund surplus lender credits to borrowers who had gotten a credit to cover closing costs by agreeing to a higher interest rate. When the closing costs ended up being lower than the estimated costs, Veterans United failed to lower the interest rate, lower the principal balance, reduce the down payment, give the customers a refund, “or pursue any other means of refunding the surplus to the borrower,” DFS said.
“While we appreciate Veterans United’s willingness to make its customers whole, we emphasize that lenders must not take advantage of the moving parts of the loan origination process in order to obtain hidden profits at their customers’ expense,” said New York Financial Services Superintendent Maria T. Vullo. “New your borrowers – and New York veterans in particular – must be confident that they will get what they pay for from their mortgage lenders. Mortgage lenders have a responsibility to make sure their borrowers receive the full benefit of their agreements with their lenders.”
As part of its agreement with the DFS, Veterans United will pay full restitution to “all known affected consumers,” including 9% interest. The company will also pay an estimated restitution to customers whose records have been lost, according to the DFS. The company has also agreed that in the future it will immediately return any surplus lender credit to the borrower, either by a cash payment or through a reduction of the mortgage’s principal balance.
Related stories:
Only a fraction of veterans take advantage of VA loans
New York proposes banning people from finance sector for ‘egregious’ behavior
The New York Department of Financial Services announced that Mortgage Research Center – which does business as Veterans United Home Loans and VAMortgage Center – will pay about $604,000 in restitution to New York consumers. The company will also pay a penalty of $500,000 to the state.
According to the DFS, an examination found that in at least 322 cases, Veterans United did not refund surplus lender credits to borrowers who had gotten a credit to cover closing costs by agreeing to a higher interest rate. When the closing costs ended up being lower than the estimated costs, Veterans United failed to lower the interest rate, lower the principal balance, reduce the down payment, give the customers a refund, “or pursue any other means of refunding the surplus to the borrower,” DFS said.
“While we appreciate Veterans United’s willingness to make its customers whole, we emphasize that lenders must not take advantage of the moving parts of the loan origination process in order to obtain hidden profits at their customers’ expense,” said New York Financial Services Superintendent Maria T. Vullo. “New your borrowers – and New York veterans in particular – must be confident that they will get what they pay for from their mortgage lenders. Mortgage lenders have a responsibility to make sure their borrowers receive the full benefit of their agreements with their lenders.”
As part of its agreement with the DFS, Veterans United will pay full restitution to “all known affected consumers,” including 9% interest. The company will also pay an estimated restitution to customers whose records have been lost, according to the DFS. The company has also agreed that in the future it will immediately return any surplus lender credit to the borrower, either by a cash payment or through a reduction of the mortgage’s principal balance.
Related stories:
Only a fraction of veterans take advantage of VA loans
New York proposes banning people from finance sector for ‘egregious’ behavior
